CD4+ type 1 T regulatory (Tr1) cells have a crucial role in inducing tolerance. Immune regulation by these cells is mainly mediated through the secretion of high amounts of IL-10. Several studies have suggested that this regulatory population may be involved in tumor-mediated immune-suppression. However, direct evidence of a role for Tr1 cells in human solid tumors is lacking. Using ex vivo isolated cells from individuals with hepatocellular carcinoma (HCC; n = 39) or liver metastases from colorectal cancer (LM-CRC; n = 60) we identify a CD4+FoxP3−IL-13−IL-10+ T cell population in tumors of individuals with primary or secondary liver cancer that is characterized as Tr1 cells by the expression of CD49b and the lymphocyte activation gene 3 (LAG-3) and strong suppression activity of T cell responses in an IL-10 dependent manner. Importantly, the presence of tumor-infiltrating Tr1 cells is correlated with tumor infiltration of plasmacytoid dendritic cells (pDCs). pDCs exposed to tumor-derived factors enhance IL-10 production by Tr1 cells through up-regulation of the inducible co-stimulatory ligand (ICOS-L). These findings suggest a role for pDCs and ICOS-L in promoting intra-tumoral immunosuppression by Tr1 cells in human liver cancer, which may foster tumor progression and which might interfere with attempts of immunotherapeutic intervention.